Oore­doo re­duces Myan­mar losses

The Myanmar Times - - Business - STEVE GIL­MORE s.gil­more@mm­times.com

QATARI tele­com firm Oore­doo con­tin­ues to re­duce losses in its Myan­mar arm rel­a­tive to 2015, ac­cord­ing to the group’s third-quar­ter re­sults, although the Myan­mar op­er­a­tion saw new sub­scrip­tions dip com­pared to the last two quar­ters. Un­like ri­val telco Te­lenor, Oore­doo’s Myan­mar op­er­a­tions are not yet con­sis­tently prof­itable. But the Qatari firm’s Myan­mar arm is still hav­ing a much bet­ter year fi­nan­cially than in 2015.

Across the first three-quar­ters of 2015, Oore­doo’s earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion – EBITDA – were neg­a­tive Q30 mil­lion (K10.3 bil­lion; US$8.2 mil­lion). Over the same pe­riod this year, EBITA was only neg­a­tive Q7 mil­lion – a 76 per­cent fall in losses.

In a re­sults call held yes­ter­day a mem­ber of the firm’s se­nior man­age­ment said the Myan­mar op­er­a­tions were “al­most EBITDA neu­tral”.

The firm in­tro­duced “voice and in­ter­net of­fers in the mar­ket” that helped ac­cel­er­ate rev­enue growth, said Rene Meza, chief ex­ec­u­tive for Myan­mar. “We also launched af­ford­able 3G de­vices and part­nered with 4G de­vices man­u­fac­tur­ers in or­der ac­cel­er­ate data us­age and 4G adop­tion.”

The Qatari firm was first to roll­out 4G in Myan­mar in May, fol­lowed by Te­lenor and state-owned MPT.

Oordeoo’s Myan­mar EBITA for the third quar­ter of 2016 alone was neg­a­tive Q4 mil­lion (US$1 mil­lion). Te­lenor re­ported its own third-quar­ter re­sults last week, re­port­ing Myan­mar EBITA of N774 mil­lion (K117.9 bil­lion; US$93.5 mil­lion).

The Qatari firm is also see­ing rev­enue rise rel­a­tive to last year, hit­ting Q1.1 bil­lion for the first three-quar­ters of 2016, com­pared to Q782 mil­lion over the same pe­riod in 2015. Around half the rev­enue raised so far this year is from the most re­cent quar­ter, ac­cord­ing to the firm’s re­sults.

But although Te­lenor and Oore­doo are see­ing their fi­nan­cial re­sults im­prove, the rate of new sub­scrip­tions is slow­ing for both firms. Oore­doo added around 800,000 new sub­scribers in the third quar­ter of this year, hav­ing added at least 1 mil­lion in the first and sec­ond. Oore­doo’s net­work now cov­ers more than 85pc of the pop­u­la­tion, ac­cord­ing to the firm’s Q3 re­sults. Sheikh Saud bin Nasser Al Thani, the group’s chief ex­ec­u­tive, said the firm’s roll­out of 4G in Myan­mar and the in­tro­duc­tion of af­ford­able 3G hand­sets had sup­ported the ex­pan­sion.

As the tel­cos ex­pand fur­ther into rural ar­eas, how­ever, rev­enue per user is likely to drop. Te­lenor re­ported that av­er­age rev­enue per user (ARPU) in lo­cal cur­rency de­creased by 28pc, “due to in­creased pen­e­tra­tion in rural ar­eas and tougher com­pet­i­tive en­vi­ron­ment”.

Data on Oore­doo Myan­mar’s ARPU for the most re­cent quar­ter was not avail­able at press time. But Mr Meza, said that as “mo­bile pen­e­tra­tion ac­cel­er­ates in rural Myan­mar ARPU [will] re­main un­der pres­sure”.

Myan­mar was also pri­mar­ily re­spon­si­ble for most of the wider Oore­doo group’s for­eign ex­change losses in the third quar­ter, mem­bers of the man­age­ment said in re­sponse to questions on the re­sults call.

The Myan­mar op­er­a­tion has dol­lar-de­nom­i­nated debt, with “no lo­cal cur­rency debt-rais­ing op­tions”, said one se­nior Oore­doo rep­re­sen­ta­tive. The kyat de­clined over 6pc against the dol­lar in the third quar­ter of this year. Pay­ment of dol­lar debt in lo­cal pro­ceeds re­sulted in for­eign ex­change losses, he said.

Newspapers in English

Newspapers from Myanmar

© PressReader. All rights reserved.